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McDonald’s said on Monday that business in the Middle East had picked up after a year in the doldrums related to boycotts over the war in Gaza, helping to drive an unexpected rebound in worldwide sales.
The US fast-food chain said global comparable sales increased by 0.4 per cent in the fourth quarter year on year, defying predictions of a 0.4 per cent decline, based on a Visible Alpha poll of analysts.
Propelling the rise in sales were gains in certain international markets led in part by the Middle East, the Chicago-based company added.
McDonald’s sales have been under pressure since Hamas’ attack on Israel in October 2023 led to a massive offensive by the Israel Defense Forces in Gaza.
Boycotts against US brands including McDonald’s and Starbucks were launched in several Middle Eastern countries as well as others with Muslim majorities such as Indonesia and Malaysia.
The pro-Palestinian Boycott, Divestment, Sanctions movement alleged in 2023 that McDonald’s was “complicit with Israeli atrocities” after an Israeli franchisee’s decision to offer discounts and free meals to soldiers and security forces.
Last October Ian Borden, McDonald’s chief financial officer, reiterated sales would be under pressure “as long as the war in the Middle East continues”. Israel and Hamas agreed a ceasefire last month.
Comparable sales in a McDonald’s international division composed mainly of licensees rose by 4.1 per cent year on year in the fourth quarter, the first increase in 12 months.
The division’s performance was “led by the Middle East and Japan”, McDonald’s said.
In the US, comparable sales fell by 1.4 per cent in the fourth quarter, a deeper than expected decline, which McDonald’s said reflected reductions in the average amount spent by customers during each visit even as footfall showed a modest revival.
McDonald’s has been extending discounts and promotions in a bid to perk up sales.
The US sales decline came after the company grappled with an E. coli outbreak tied to an onion supplier in Colorado that led to more than 100 cases of illness and one death, according to the Centers for Disease Control and Prevention.
Restaurants in several states temporarily shut down in late October as authorities investigated and contained the outbreak.
McDonald’s said revenue in the fourth quarter was unchanged from a year earlier, at $6.4bn, slightly less than analysts’ estimates.
Revenue includes sales at all company-owned restaurants and fees paid to McDonald’s from franchised stores.
Comparable sales are derived only from restaurants open at least 13 months, both company-owned and franchised.
Net profit fell 1 per cent to $2bn, below estimates for $2.1bn.
